Australia considers fees for foreign property buyers
Australia mulls fees for foreign buyers of property as wealthy Chinese investors accused of fuelling the booming housing market Property prices in Melbourne's Central Business District have tripled in the last six years, fuelled by the interest of overseas developers
Australiais considering placing additional charges on foreign buyers entering its booming property market after an inquiry found authorities had failed to enforce limits on purchases by investors from abroad.
The move follows growing concerns about the impact of foreign buyers, particularly cash-rich investors from China, who have poured billions of dollars into the local market and fuelled soaring housing prices.
A parliamentary committee said authorities had failed to police the recent boom and had not penalised or prosecuted a single foreign investor since 2008. It has recommended a £820 ($1,500) fee for properties purchased by foreign investors.
"No one really knows how much foreign investment there is in residential real estate nor where that investment comes from," the committee chairwoman, Kelly O'Dwyer, a government MP, told ABC Radio.
"If you are not prepared to enforce the rules, then it is less likely that people will comply with the rules."
House prices in Australia are among the most expensive in the world, with average values in Sydney up 50 per cent in the past five years.
Analysis by Credit Suisse found earlier this year that Chinese buyers purchased £13 billion ($AUS24 billion) worth of properties in the past seven years and were responsible for 18 per cent of new housing purchases in Sydney.
The committee found that existing penalties for foreign buyers were appropriate but enforcement had been "severely lacking".
"Australians must have confidence that the rules, including those that apply to existing homes, are being enforced," Ms O'Dwyer said.
"Our inquiry revealed, that as it stands today, they could not have that confidence."
Under Australia's foreign investment rules, non-citizens are restricted to buying new or off-the-plan properties.